Berkeley’s exclusivity agreement with Motivate’s Ford GoBike system means Lime bikes, like the one above, are not allowed, though you may spot one occasionally on a Berkeley street. Photo: Tracey Taylor

Berkeley’s network of 400 blue and green Ford GoBikes and their accompanying 37 stations is almost complete, according to city officials. Only two more stations need to be installed to finish the Berkeley segment of the regional bike-sharing project. Yet the deal that brought a network of affordable, corporate-sponsored bikes to the city also gave the private company that operates the system an exclusive lock on bike sharing in Berkeley until 2025. The agreement restricts competition from new entrants like Lime and delays next-generation electric-assisted bike sharing options, say critics.

It has also led to perhaps unintended consequences for riders in neighboring cities where GoBike is not available, such as Albany and El Cerrito. Because of Berkeley’s exclusive deal, cyclists from these cities who ride into Berkeley are finding that they face a fine or suspension of their Lime accounts if they try to leave their bikes within the city’s limits. According to Berkeley Transportation Manager Farid Javandel, Berkeley and Albany have discussed the problem but he wasn’t optimistic about how to resolve it. “We are in communication to find something that can work for everybody,” said Javandel, who is an Albany resident and sits on Albany’s Traffic and Safety Commission, which is in charge of bike sharing. “So far there’s not an obvious solution.”

East Bay cities that are not part of the Ford GoBike network—Alameda, Albany, El Cerrito, Richmond, and Walnut Creek—have dockless bike sharing provided by Lime, a company founded by Cal graduates and nurtured at the university’s Skydeck startup accelerator in downtown Berkeley. Unlike GoBikes, which are picked up and left at physical stations, dockless bike sharing allows riders to find bikes via an app wherever the bikes are—in the middle of a sidewalk, at a busy corner, at a bike rack, or anywhere else. Such dockless bikes can be ridden to any location and left wherever and whenever riders no longer need them.

Berkeley on the other hand is part of a regional deal with bike-sharing company Motivate, which operates docked bike rental networks in major U.S. cities such as Boston, Chicago, New York, and Washington, D. C. The contract between Berkeley, Emeryville, Oakland, San Francisco, and San Jose, the regional Metropolitan Transportation Commission, and Motivate expanded an existing and government-funded bike sharing pilot program in 2015.

Bike share bubble?

Bike and scooter share companies are currently all the rage among private investors, receiving millions in investment and garnering billion-dollar valuations. Motivate was acquired in July by car-sharing company Lyft in a deal that has been valued at $250 million in media reports. The acquisition will not impact the contract that Motivate has with participating cities—including its exclusivity. At some point, the deal will allow Ford GoBike riders to use Lyft’s app to find and rent bikes.

At the same time, Lime announced that it had received $335 million in funding from Google’s parent company Alphabet, Uber, and other sources. This latest round of investment values the company at $1.1 billion. Similar to the Motivate deal, the Lime deal will make Lime bikes available in Uber’s app. Although Lime would not disclose the size of Uber’s investment, it was described as “sizable.” In April, Uber bought e-bike share company Jump, which is currently piloting its bright-red electric-assist bikes in San Francisco. The value of the deal, although not disclosed, was reported near $200 million. BIRD, which operates its electric scooter sharing business in Oakland, has raised $300 million and is valued at $2 billion.

As part of the exclusive agreement with Motivate, Berkeley and other participating cities did receive several important concessions including 20 percent of all bike docks being located in low-income neighborhoods, greatly reduced annual memberships for low-income riders ($5 for the first year, $5 per month after, versus $15 per month or $149 per year), money for outreach to the community to help residents learn about the system and make sure it gets used, and revenue and data sharing with cities. “We asked them to give a lot, so something had to be given in exchange,” said Javandel. “Do I like exclusivity? No, not really, but it was negotiated because we got something we really wanted and we had to make it worth their efforts.”

Javandel further explained how difficult it was for Motivate to find a sponsor to pony up $50 million to make the system a reality without using taxpayer funds. One of the carrots to get Ford to invest was the exclusivity deal. “When Motivate was looking for a sponsor it took a lot longer than expected,” he said. “Investors had a lot of doubt and the program almost didn’t have a sponsor, meaning the region would have had to invest in it. [Exclusivity] might be one thing that kept the program afloat.”

Opening the Lime app reveals the situation in Berkeley. The entire city is covered by a red box and users see a message that states: “No Parking Zones: Repeatedly parking here may lead to a fine or suspension of your account.” Although Oakland and Emeryville are also part of the GoBike network and share the same exclusivity clause, they are not covered in red and there is no threat of a fine from these cities.

Dave Campbell, advocacy director for Bike East Bay, argues that this problem is evidence of a lack of regional planning when it comes to transportation. “Two to three years ago we didn’t foresee this issue of competing systems and how they would interact or how people complete their trips,” he said. “It is sad to see a red line around Berkeley when I open my Lime Bike app. That’s not Berkeley’s finest hour.”

A Ford GoBike station on Vine Street in the Gourmet Ghetto. Photo: Tracey Taylor

Berkeley’s unique situation

Beyond the exclusive GoBike deal, Berkeley also insists that all companies wishing to operate a transportation service in the city apply for a franchise agreement. When Lime bikes from other cities started appearing in Berkeley last year without a franchise agreement (in addition to breaking Motivate’s exclusive contract), City Attorney Farimah Brown sent a letter to Lime threatening fines of at least $1,000 a day and possible jail time if the bikes were not immediately removed.

Lime’s response was to enact the red zone and the warning, which has satisfied the city. No fines were issued against Lime, even though a few Lime bikes and electric scooters continue to appear on city streets, according to Javandel. Lime’s Director of Strategic Development Sam Dreiman, who is in charge of governmental affairs for the company, revealed that any fines collected by Lime would not go back to Berkeley but remain with the company. He did not know, however, if any Lime rider had ever been fined or had their account suspended.

Lime is not the only company to run afoul of Berkeley’s restrictive transportation rules. UC Berkeley had a short seven-week pilot of electric-assisted Jump bikes, which provided six of the company’s bicycles to travel between the Berkeley campus and Albany-based University Village. That pilot was discontinued because of a desire to work within the city’s franchise requirements and its deal with Motivate, according to Dave Sorrell, manager of the UC Berkeley’s Alternative Transportation Program. Dockless bike and scooter sharing operators have continued to approach the university, but it is waiting on the city before allowing any to operate.

Similarly, Skip, a San Francisco-based electric scooter share company, reportedly has deployed scooters in Berkeley as of July without permission near campus and on or near College Avenue, Martin Luther King Jr. Way, and University Avenue. Javandel said he would contact Skip to let it know it is operating illegally in the city and then take more serious steps if the company doesn’t stop. “City staff have observed them and brought it to my attention,” he said. “[They are] kind of free floating, there’s no infrastructure associated with it but they are still responsible for following our laws.”

Albany takes a more laissez-faire approach. Lime was able to deploy its bikes and begin operation there with only a business license, according to Albany spokesperson Claire Griffing. Lime first deployed its bikes in Albany in January (when they were also unveiled in El Cerrito) for a six-month pilot and continues to operate in those cities. At an Albany Traffic and Safety Commission meeting on July 26, a Lime representative revealed the company is interested in deploying e-bikes and scooters in Albany as well but had no timeline for when that might be. Albany traffic and safety commissioners indicated no permits or licenses would be required for the company.

Although Albany would be interested in hosting GoBike in the future as well, there are no current plans to expand the network of docked bikes to new cities. “It is unfortunate that we do not currently have the same bikeshare system as our neighbors in Berkeley,” Griffing said in a written statement. “Ideally, the region would have consistent bikeshare services to maximize utility, and we hope this will be the case in the future.”

Lime riders who wish to enter Berkeley do have one loophole through BART. The BART system is an independent governmental agency with its own police and control over its land. Although there are Ford GoBike installations at BART stations, the transit agency has its own deal with Motivate that is not exclusive. Steve Beroldo, who manages bike sharing activities for BART, says the agency is in negotiations with Lime to deploy the company’s bikes on BART properties, including those in Berkeley. At this point, he says, a rider from Albany could ride a Lime bike to North Berkeley BART and leave it there without fear of a penalty. The same would be true for all other BART stations. In fact, the Lime app shows that within the Berkeley red zone are three small blue boxes, around North Berkeley, Downtown, and Ashby BART stations.

Future options

The exclusive bike deal with Motivate does not prevent other companies from deploying electric bikes in Berkeley, although it does give Motivate a 90-day head start to introduce them without competition. Additionally, the deal does not cover electric scooters, which can currently be seen zooming around neighboring Oakland and Emeryville but have not officially been deployed in Berkeley because of the city’s franchise requirement.

According to Lime, it is in talks with Berkeley on how to introduce electric bikes and scooters but talks have not moved quickly. “The city hasn’t been very clear about what a franchise agreement would be or what the process would be to review it,” said Lime’s Dreiman. “We’ve provided agreements that we’ve used with other cities in the area. We’ve received emails from city staff that they are reviewing them.”

The city, according to Javandel, has not received any official application for a franchise agreement from Lime although he does acknowledge that discussions have occurred between the two parties.

The franchise requirement, part of the city’s charter and not required by other East Bay cities, significantly slows down companies from entering the Berkeley market. The process for a company securing a franchise agreement in Berkeley requires public hearings and city determinations of what benefits Berkeley will receive for granting the franchise. Only once that agreement is secured can a company then move forward and apply for a business permit. City commissions, such as those on disability and on aging must be involved as well, according to Javandel, to make sure that sidewalks or bus stops don’t get clogged with discarded scooters and electric bikes and interfere with wheelchairs or the elderly.

As an example of the hurdles involved, Javandel points to one-way car sharing service Gig Car Share. “It took more than a year to do all those administrative tasks [for one-way car sharing],” he said. “I would like to move forward with other shared mobility systems, but I don’t want anyone to think it’s going to happen tomorrow.”

The city is currently formulating a process to allow scooters and e-bikes to launch legally. On July 10, the Berkeley City Council asked the Transportation Division to generate a report within 90 days on how to move forward. Javandel was not optimistic he could meet that deadline, rather suggesting a date in October for a full report that includes input from the city’s multiple commissions, transit agencies and business districts.

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